A survey released Thursday finds that annual health benefit cost growth will ease in 2009.
Mercer, a global financial advisor and wholly owned subsidiary of Marsh & McLennan Companies, Inc., released preliminary survey findings that indicate that health benefit costs will rise to 5.7 percent next year - the lowest increase in more than 10 years.
Since 2005, annual health benefit cost increases have slowed to about 6 percent, and last year costs rose 6.1 percent.
Early survey responses of 1,317 employer health plan sponsors say the total cost to renew current health plans - if they were to make no changes - would grow by nearly 8 percent on average. Small employers (those with 10-499 employees) would see an even higher increase, of about 10 percent.
However, a majority of respondents said they will take action to lower their cost increases.
"It's a relief to see cost growth trending down, even slightly," said Blaine Bos, a senior Mercer health and benefits consultant based in Minneapolis. "But this is not an unqualified success story. While some employers are holding down cost growth with innovative methods of improving healthcare quality and efficiency, more typically employers struggling with increases they can't handle resort to the tried-and-true method of shifting cost to employees."
More than 59 percent of employers said taking action to reduce their 2009 cost increase would include raising deductibles, copayments, coinsurance or employee out-of-pocket spending limits.
Employee cost-sharing has risen sharply over the past five years; between 2003 and 2007, the median family deductible for in-network services in a PPO rose from $1,000 to $1,500.
About 19 percent of employers said they will lower their 2009 costs by adding a consumer-directed health plan (CDHP). Among the survey respondents that currently offer a CDHP, the predicted 2009 cost increase averaged 4.5 percent, compared to 6.4 percent for respondents not offering a CDHP.
"This opportunity for saving is good news for employers committed to offering health coverage. But even though CDHPs cost about 20 percent less than a typical medical plan, the percentage of very small employers providing employee coverage keeps shrinking," said Bos. "This is one of the leading causes of the increase in the number of uninsured over the past few years, and a troublesome finding for policymakers who were counting on these plans - specifically HSAs - to reverse the trend."
Mercer's complete survey results will be released later this year.
Do you think lowered costs for health benefits will increase the number of Americans with health insurance? E-mail Associate Editor Molly Merrill at molly.merrill@medtechpublishing.com.